You found your dream home in Colorado, but can you actually afford the real estate commission in Colorado? Clients tend to focus on the end result and sometimes overlook the hidden costs of a real estate transaction. While some of these costs get wrapped into the purchase price of the home, it’s critical to understand how much you’ll end up paying.
In addition, real estate agents should understand the value of their time and what they’ll be paid with each real estate transaction.
What is the Real Estate Commission Rate in Colorado?
The average real estate commission in Colorado is right at the national average of 5.5%, according to a poll of FastExpert agents.
So, if you’re looking at selling your home, you can expect to pay about $5,500 in real estate commissions for every $100,000 in a typical home transaction.
The median sale price of a home in Colorado is $559K. Therefore, the typical real estate commission or realtor fees on a home is $30,745. This is no small sum, and should be taken into consideration with every real estate transaction.
Read on to find out how the commission is split between buying and listing agents, as well as who pays the realtor fees.
What is the Income of a Colorado Real Estate Agent?
The average income of real estate agents in Colorado is $101,119, according to Indeed. Real estate agents with less experience, understandably, make less than the average and land around $91K.
These numbers are averages and can vary based on experience, location, and quantity of real estate transactions.
Colorado Real Estate Agent Salary by City
- Littleton – $131,809
- Aurora – $118,970
- Westminster – $113,320
- Parker – $112,075
- Lakewood – $107,129
- Longmont – $101,414
- Denver – $97,806
- Colorado Springs – $97,764
How is the Commission Paid?
The real estate commission is typically split between the buyer’s agent and the seller’s agent, with each side getting 2.75% of the total sale price. So, if you’re selling your home for $300,000, the real estate commission would be $8,250, with each agent getting $4,125.
Who Pays the Commission?
The real estate commission is typically paid out of the proceeds from the home sale. Sellers are often the ones responsible for paying both the buyer’s agent and the seller’s agent commissions. This is just one more expense to factor in when you’re budgeting for your home sale.
It is possible to pass some or all of the commission to the the buyer in purchase price and can be negotiated in the initial offer period.
What if You Don’t Use an Agent?
You don’t have to use a real estate agent when selling your home, but it’s generally not recommended. An experienced agent will be familiar with the local market and can help you price your home correctly from the start. A good agent will also help market your home and negotiate with buyers to get you the best possible price.
If you do decide to sell your home without an agent, you’ll still need to pay a buyer’s agent commission if the buyer is represented by an agent. In that case, you would be responsible for paying the full 2.75% commission for the buyer’s agent.
Are Brokerage Commissions Tax-Deductible?
No, the IRS does not allow you to deductcommissions when you sell your home.
However, you may be able to deduct some of the other expenses associated with selling your home. Be sure to speak with a tax professional to see what expenses you may be able to deduct.
Find the Perfect Agent for Your Perfect Home
If you’re considering selling your home, contact a FastExpert agent in Colorado today. Our agents will help you through every step of the process, from listing your home to negotiating with buyers.
They have the experience and knowledge to get you the best possible price for your home. So, what are you waiting for? Simply enter your zip code below to get started!